To what extent did the policies of Sergei Witte address the problems facing Russia at the end of the nineteenth century?
Russia faced many problems at the end of the nineteenth century. Under Minister of Finance Ivan Vyshnegradskii there had been famine because of high taxes on consumer goods which had forced peasants to sell more and more grain. The government were slow to act and, although they eventually enforced a ban on grain exports, 350,000 died of starvation or disease. Economically and industrially Russia was also falling far behind many other Western countries at the time, like Britain and Germany. When Count Witte became Minister of Finance in 1893, there was desperate need ...view middle of the document...
A healthy industry encouraged foreign investment and provided a good basis to address other problems like improving infrastructure.
Witte was also successful in exploiting the natural resources that Russia had. There were minerals in Siberia that could be used to stimulate further growth in industry, and government policy enabled a rapid increase in the output of coal in the Ukraine and of oil in the Caucasus. Between 1890 and 1900 Russia's coal, iron, steel, and oil production tripled. Cereal production also greatly increased in European Russia. This would give Russia something to export, and therefore get them some foreign capital which was worth more than the rouble.
To improve Russia’s industry Witte needed money, and a good place to get that was investments from abroad. Russia had a high rate of inflation, so foreign capital was more valuable. He decided to make the rouble more sought after by putting it on the Gold Standard in 1897. This meant that it was directly exchangeable for gold, which had a higher value. This was extremely successful, as foreign investment dramatically increased and value of the rouble increased. The increase in national income between 1894 and 1913 in European Russia was 50%. More investment meant that Witte could pour money into improving industry, a step towards his goal of catching up with other industrialised countries. He also negotiated large loans to stimulate Russia’s economy.
The industrialised Russia that Witte planned needed a workforce and a way to transport goods. He had been the Director of the Department of Railway Affairs, so he used this knowledge to help him solve both problems by expanding the Russian railway network. It would also open up trade with new areas like China. By 1900, Russia had 53,234km of railway – more than any other nation at the time. This included the 5,400 mile Trans-Siberian Railway which linked Russia with the Far East, which was completed on time in 1903. It encouraged peasants from rural areas to migrate into urban areas which helped with the growth of industry. A lot of the railway system was owned by the state, as Witte knew that Russia’s economy would need a lot of state intervention to be successful. As well as state-owned railways there were also state banks.
However, Witte’s policies also caused economic, political and social problems for Russia. One of his main aims was expansion of industry and, although this created jobs, the conditions for the proletariat were poor. They worked long hours and slept by their factory machines or went home to overcrowded accommodation. In St. Petersburg, one of the new urban areas of industrial growth, in 1904 the average apartment housed 16 people – meaning about six people lived in each room. Sanitation was terrible, with only a third of St. Petersburg houses having running water, and piles of human waste lined the streets. Fleas and disease spread quickly in the cramped living spaces so the health of the workforce...